White House: stablecoin yields won’t boost US bank lending

The White House Council of Economic Advisers says stablecoin yields are unlikely to meaningfully affect US bank lending or broader credit conditions. Its report estimates a restriction on interest-bearing stablecoin products would add only about $2.1B to total credit (roughly 0.02% of the $12T loan market) and deliver a net consumer welfare loss. Banking industry groups dispute this. The Independent Community Bankers of America warns that yield-bearing stablecoins could trigger up to $1.3T in lost deposits and reduce lending by as much as $850B, arguing stablecoins may pull funding away from banks. The White House counters with reserve flow mechanics: most stablecoin reserves are already within the banking system and typically rotate through US Treasury bills and deposits. It estimates around 12% of reserves sit outside banking and therefore can’t be converted into loans. Overall, the White House conclusion is that banning stablecoin yields would not “safeguard bank lending,” but would mainly limit what stablecoin holders earn. Regulatory momentum continues. The GENIUS Act (signed July 2025) required 1:1 reserves and bars issuers from directly paying yields; the FDIC has proposed an oversight framework; and the CLARITY Act is said to be near final stages.